Rental Property Investor · Seattle, WA · Member since 2014 · 149 posts · 58 votes
This question is courtesy of an investor friend.
He just found out that his insurance company will not insure the 3/2 house he bought in Fort Lauderdale, Florida, because the mother in law unit is illegal.
The previous owner did not have permission from the county to build the addition. He didn't know this until now. His insurance company will only insure if he guts the unit or rebuild it with the proper permits. He does not like either option.
I've suggested that he shop around to see if another insurer will cover the house under more acceptable terms. What other advice do you have for him?
Real Estate Broker · Fort Lauderdale, FL · Member since 2016 · 53 posts · 7 votes
7y
Suzie, you are located in Seattle, WA; is your 'investor-friend' also living in Seattle, WA?
The BEST-LEGAL thing to do is to HIRE A REPUTABLE FORT LAUDERDALE RE ATTONEY! As-this-property is right now, no reputable insurance carrier will ever issue a policy!
1ST, has this 'friend' consulted a licensed builder-contractor to see IF this can be remedied by removing the illegal addition? 2nd … How was the property purchased? Let this be a lesson to others. If you do not know what you are doing, hire someone that does!
Rental Property Investor · Seattle, WA · Member since 2014 · 149 posts · 58 votes
7y
@Account ClosedThanks for your response. My friend lives in Florida, and the property was purchased via a bank loan. I'll forward your response to him. Thanks again.
Real Estate Broker · Fort Lauderdale, FL · Member since 2016 · 53 posts · 7 votes
7y
Suzie, please inform your friend not to wait any longer to engage 'A REPUTABLE FORT LAUDERDALE REAL ESTATE ATTORNEY' especially since you stated 'the property was purchased via a bank loan'. The question I would ask the attorney is why the 'bank' that provided the mortgage loan did NOT find this problem when the property was inspected as part of mortgaging process? Your friend might have a good legal case. … Please keep us informed.
Rental Property Investor · Seattle, WA · Member since 2014 · 149 posts · 58 votes
7y
@Account Closed I wondered too why the bank didn't find this problem. I will urge him to talk to a real estate attorney. Thanks so much, and I'll definitely let you know how everything turns out.
Real Estate Broker · Fort Lauderdale, FL · Member since 2016 · 53 posts · 7 votes
7y
Suzie … Inform your friend that if he does not know of any GREAT attorney here in South Florida, to contact me. I get no money from any professional that I recommend! I only do favors. Have him contact me.
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
7y
It’s not the bank’s responsibility to verify you’re buying a property with a legal addition, prudent for the value of their collateral perhaps, but not obligated to you to do it.....pursuing the bank for any kind of redress is foolish.
Bob Pepe with Pelican Insurance in Fort Lauderdale is a great insurance guy, who has done a lot of flips too.